Jaron Lanier Q&A: Consumers, take back your data

Like some dreadlocked Ulysses, computer visionary Jaron Lanier hopes to steer America well away from the economic shipwreck he sees dead ahead if we succumb to the siren song of such digital networks as Google, Facebook and Twitter.

Jaron Lanier, author,
'Who Owns the Future?'

Photo: Johnathan Sprague

In his book, "Who Owns the Future?," Jaron Lanier argues that consumers should take back the control over their valuable personal data that has been usurped from them for a few measly discounts.

And who better to navigate these tricky data straits than Lanier, the outspoken humanist and convivial pioneer of virtual reality (he coined the phrase) hailed by Time magazine as one of the world's 100 most influential thinkers? After all, it was Lanier and his cohorts who brought digital networking to life in the first place.

In his new manifesto, "Who Owns the Future?" Lanier says the rise of big data crunchers led in part to the Great Recession by turning the personal details we humans share for free into a commodity that destroys jobs, displaces families and hollows out the middle class.

Ultimately, Lanier says the short-term fortunes of the Facebooks and Tumblrs will self-correct, but not without widespread pain for many.

His alternative? Compensate consumers for the data we now give away, thus enabling the economy to grow, not shrink.

And do so before our robot overlords make actual work obsolete. We spoke to Lanier by telephone:

Q: The title of your previous book, "You Are Not a Gadget," aptly summed up its premise. This book might be similarly subtitled, "You Are Data and That's Worth Something."

A: In an economic sense, yes. I think that people are more than data obviously, but if you're thinking strictly in economic terms, all people can be is data, right? Because economics is the study of the sort of miserable impact we have on each other.

Q: You depict data as the greatest cash crop ever: You don't have to plant it, it's easy to harvest, it's free (at least for the time being), and it generates profits for a select few virtually out of thin air. Why would those who are making fortunes off of our data suddenly decide to pay us for it?

[W]e're gradually making fewer and fewer customers, and therefore fewer and fewer businesses. It's hard to see because it happens slowly but we're undoing the market economy by undoing value itself.

A: It's the same thing that persuaded Henry Ford to balance his workers' wages with the cost of his products in the last century. He understood that there are two ways to make a profit in a market economy: You can shrink the market and concentrate your wealth or grow the market and let your portion of it grow as well. If you shrink the market and concentrate wealth, which is what's going on with Tumblr, it's a self-limiting game; it can't go on for too long until it breaks. That's what happened with finance and insurance in this country and will happen with other things. But if it becomes growth, then it can go on forever. And it should go on forever because growth is not a fiction; it reflects an increased competence in the way that people can depend on each other. It's an honest form of value creation and a better model toward wealth than shrinkage.

Q: Your book postulates that the rise of computer networks brought about the Great Recession. Please walk us through that.

A: If I may oversimplify, I'm going to break it down into three centuries. In the 19th century, there was a ton of anxiety that, as machines got better, they would put people out of work. That's what the Luddite riots (of 1811-12) were about, that's why science fiction started, that's why Marxism started and many other 19th-century things. In the 20th century, the problem was avoided for a really interesting reason: We collectively decided that it was still OK to pay people, even if the jobs weren't as miserable and dangerous and smelly as they used to be. We decided that it was still OK to pay a trucker, even if he didn't need to deal with horses and was now just driving a motorized vehicle. The labor movement created a lot of that, but not alone. There was this whole notion that you have to have a balance or else you wouldn't have markets and you couldn't have economic growth.

Q: Sounds reasonable. What's the problem now?

A: Now, in the 21st century, we're deciding to throw out that solution. We're saying, 'Ha! Screw the taxi medallion; just get a Zipcar or Freeride over the Internet.' And eventually we'll have self-driving cars and trucks anyway. We'll have 3D printers to get rid of the factory. The thing is, all of these technologies still depend on data that comes from real people. The really tricky thing here is, in the transition from the 19th to the 20th century, we said, "We'll still pay people even if the jobs aren't miserable." Now, from the 20th to the 21st century, we're kind of saying. "Are you kidding me? This has just gotten too easy; we're not going to pay you anymore."

Q: Good if you're Mark Zuckerberg; bad if you're sort of everybody else.

A: The problem with that is, it undoes society. It means we're gradually making fewer and fewer customers, and therefore fewer and fewer businesses. It's hard to see because it happens slowly but we're undoing the market economy by undoing value itself.

Q: Wouldn't the wealthy also suffer, say if the stock markets collapse?

A: I gotta tell you, people who are doing really well are not in the stock market with everybody else anymore. They might be in private equity or other things that other people don't have access to. That loss of commonality is part of the problem, actually. It kills capitalism over time. In the short term, you can do great if you separate yourself off into some special little bubble, but in the long term, you'll undo the very thing that you're winning at. It's a destruction of the market system.

Q: You blame our financial collapse in part on the search for a perfect investment. Isn't that the business of business?

If you try to separate risk and reward too much, you create systems that keep on failing and require public bailouts until the very system that you're trying to be successful in is weakened and your own success means less and less.

A: What's happened to finance is, when you have access to really big computers on a network, it becomes just too much of a temptation to try to compute your way into having a perfect investment. The easiest way to understand a supposed perfect investment, or the illusion of a perfect investment, is to think about the insurance industry. If you can get enough data and enough computing to really have a pretty good idea of who is going to use an insurance policy and who isn't, you can try to only insure the people who are unlikely to use insurance and create kind of a perfect business. That's what happened in American health care. The reason that doesn't work is, you're asking the rest of society to take on all the risk you're avoiding; you're trying to separate risk and reward. And if you try to separate risk and reward too much, you create systems that keep on failing and require public bailouts until the very system that you're trying to be successful in is weakened and your own success means less and less.

A: Right. The same thing applies to the credit market, where there is this idea to only offer credit to people who don't need it. It's the oldest joke in the history of finance because the lender didn't really know who would default, but now with big computers, they kind of start to know, because you become more predictable. So if they're only going to bet on a sure thing, what that translates to is the overall economy takes on those risks and gradually you undermine even yourself because there is no other planet where you can be rich. Finance did the same thing as the insurance industry, causing whole nations to lose their credit ratings, waves of austerity, huge tightening of credit and the loss of a lot of assets with plunging real estate prices. The weird thing about it is, we see the market going up today but the same general way of doing things is in play. So I think we're setting ourselves up for repeats of this sort of thing.

Q: What's perhaps scarier for some is the potential for widespread unemployment.

A: Yeah. A big concern these days is lost career prospects because more and more stuff is done for free. You get free information from these computers, so music is free, journalism is free. I think things really get bad when the technologies of automation get much better, maybe in 20 or 30 years, when the cars start driving themselves and people have good 3D printers and they don't have to buy stuff from Apple or Samsung anymore, they can just print it out. They can print out the new printers as well. At some point when automation gets good enough and you have a massive employment crisis, that's when things have gone too far. So it's crucial for us to be talking about this now to forestall heading into that trap.

Q: You've made and lost fortunes several times. How would you rate your personal finance skills?

A: (Laughs) Wait, wait ... my family's here (repeats the question to his wife, prompting extended laughter from both). So, I would say ... middlin'. There is a tendency in the Silicon Valley community to think that the meaning of life is optimization and everybody should be maximally effective and efficient. And what I've noticed over time is that the people who are most successful on whatever terms they care about tend not to really be that way but they kind of play a longer game where they start to get into a feeling and a pattern and a more qualitative relationship to what they're doing. A lot of the really successful people are really pretty intuitive and are not that good at making the best tactical, logical decisions moment to moment. Steve Jobs was a great example of that, where he was, in a way, kind of terrible on a lot of levels and then really wonderful on some sort of broad level.

Q: To where he couldn't figure out what to leave for a dinner tip?

A big concern these days is lost career prospects because more and more stuff is done for free. You get free information from these computers, so music is free, journalism is free.

A: Well, I won't go into detail. (Laughs) I'm considered to be rather good technically, and I and a friend of mine, who is one of the foremost physicists of our day, were once caught having trouble calculating a tip. My mind wanders into the fundamentals of arithmetic, which are actually not very sound.

Q: You write that you once challenged cyberpunk author William Gibson to lighten up on his menacing vision for the future, and he graciously replied, "Jaron, I tried. But it's coming out dark." What's your silver lining playbook?

A: I have a very good reason to believe that these problems are solvable because they were actually foreseen at the dawn of networking by (computer visionary) Ted Nelson and others, and at least provisional solutions to them were also foreseen. I don't want to pretend that we already have the answers in hand, but I think we have at least a rough cut at potential answers from Ted, which is pretty good.

Q: How would you reassure college grads worried about their job prospects?

A: This is fixable. If you want to get scared about something, look at climate change. This should not be scary. It should not be viewed as being pessimistic. It should be viewed as being cool that we can talk about problems rationally in time to talk about fixing them, and that we have enough insight to see them. This is called optimism. This is the good stuff.

Published: July 2, 2013

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